New Jersey Governor Conditionally Vetoes Online Gambling Bill

February 7, 2013
New Jersey Governor Conditionally Vetoes Online Gambling Bill

New Jersey Governor Chris Christie waited until the 11th hour to conditionally veto Assembly Bill No. 2578.  Online gambling proponents see this as a win as the items that were vetoed covered taxes and regulations.  The parts of the bill that relate to online gambling are still intact.  They would go into law as long as the New Jersey Assembly agrees to the changes related to the conditional veto.

Conditional Veto Terms

Governor Christie asked for several items to be changed.  These include transparency and enforcement in the process of licensing.  The governor also asked for a tax rate of 15% as opposed to 10%.  While this amount would be competitive in most states, the brick and mortar tax rate in Atlantic City is 8% with a 1.25% reinvestment requirement.  There is also a requirement that more money be placed in problem gambling programs.  The extension of gambling into homes has been a concern of Governor Christie and more money funding problem gambling programs appears to satisfy that concern.

According to Senator Ray Lesniak, the bill’s sponsor, these changes are expected to be voted on within weeks.  He does not expect there to be any resistance to these changes that will cause any issues with this being passed in the New Jersey Assembly.  The bill previously passed by a landslide by both houses.

PokerStars Atlantic City Entry

This should help move the PokerStars acquisition of the Atlantic Club casino in Atlantic City.  There was speculation that the sale had a clause that would void the contract should the online gambling bill get vetoed.  If such a clause existed, it would be irrelevant now.

New Jersey residents will not be gambling online any time soon.  If the regulatory process in Nevada is any indication, it may be over a year before New Jersey residents are playing online poker.  The Nevada Legislature passed a law giving the Nevada Gaming Control Board the right to create online poker regulations.  Those regulations went into effect in December 2011.  There are still no online poker rooms in Nevada and there are still more delays in the online poker software testing phase.

Delaware has also passed online gambling legislation.  Like New Jersey, they would legalize both online poker and online casino games.  Their law went into effect in June 2012.  Delaware looks to have its online gambling live by the end of the third quarter of 2013.  Delaware’s online gambling would go through the state’s lottery monopoly, while New Jersey and Nevada will use their commercial casinos to offer online gambling.

Online Gambling Support Against Republican Party Platform

Republican Governor Christie is rumored to be a considering a presidential run in 2016.  Endorsing online gambling legislation runs contrary to the Republican Party’s position.  The 2012 Republican Party agenda outright attacked the online gambling community.  It will be interesting to see if his support of this bill will come up in a future national campaign.  It is possible that by that time online gambling will be widely accepted or opposition dropped from the party’s platform.

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